Bridging finance using land as security

THE SCENARIO

I was recently approached by a client who was looking to buy a few plots of land and some outbuildings in North Wales, so he could develop part of the land for a new family home. To be able to do this, my client required cheap bridging finance for six months in order to secure the land until he was in a better position to sell his existing home.

There were a few challenges that came with this, the first being the difficulty of finding a lender willing to lend in rural North Wales – as it isn’t exactly a prime location as far as security is concerned! Further to that, we also required a lender who would be happy to take land as part of the security, which is unusual with the majority of mainstream lenders. We were hit by an additional hurdle, as my client’s existing lender was unwilling to consent to a second charge mortgage.

To solve these issues, I managed to put together a package of security, which included a second charge on his existing home, while also convincing a lender (who is a very close contact of mine) to offer this at an extremely competitive rate under the circumstances.

As far as the existing lender was concerned, it was only due to my very close working relationship with the lender and their underwriters that rather than losing the deal, they were happy to take a view on my client’s case and allow an equitable charge, something they would usually never do. It was due to all of this that I was able to secure an excellent bridging finance rate for my client on a complex package of land, outbuildings and equitable charges, in an area most lenders would not even consider.

OUR SOLUTION

I was able to secure an excellent rate of just over 1% for my client – a very competitive deal for short-term bridging finance in my client’s situation.





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